US Stocks End Lower As Major Market ETFs Lose Six Percent In May; TLT Rises, USO Dips

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[Chart courtesy of MarketWatch.com]

US stock indexes extended losing their streak Thursday, dropping to their lowest levels since 2010 with the blue-chip Dow halting its winning streak in May. Investor sentiment sank following a report from payroll-services firm ADP that showed US companies added fewer jobs in May than the forecasted 157,000. At 133,000, unemployment rate is expected to remain unchanged at 8.1 percent in May.

US Treasuries rallied on fears that the economy is slowing down after as latest data showed the number of people filing for first-time unemployment benefits rose more than expected. Yields on Five-, seven-, and 10-year securities slipped to fresh all-time lows, as demand for safe haven assets spiked amid fears that the European crisis is deepening.

The benchmark 10-year yield cut losses after a report suggested that the International Monetary fund started discussions on contingency plans to save Spain’s banking industry while support for Greece’s pro-bailout party increased. At this point, it’s all chatter about a Spain bank rescue, but we will know soon if there are hard facts backing up the rumor mill.

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US Stocks Slide As Spanish Storm Looms; ZROZ Soars,

Ulli Market Review Contact

[Chart courtesy of MarketWatch.com]

US stocks ended in the red Wednesday, losing more than one percent after reports suggested that the European Central Bank has rejected the recently nationalized Bankia group’s bailout plea.

The ECB issued a statement Wednesday stating it was not consulted and can’t recapitalize Spain’s fourth largest bank. US Treasuries soared as investors sought refuge in safe haven assets amid growing European turbulence.

Spanish and Italian bond yields soared as markets remained jittery over Spain’s ability to bail out its banks that may cost Madrid €100 billion.

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7 ETF Model Portfolios You Can Use – Updated through 5/29/2012

Ulli Model ETF Portfolios Contact

The prior week’s loss of 1% was made up yesterday as the markets rebounded by 1.1% since last Wednesday’s ETF Model Portfolio report.

Fundamentally nothing has changed other than that the ECB was expected to reveal some new secret potion on Tuesday designed to solve the issues that ail Europe. Of course, this was based on nothing but rumors and the usual amount of hope.

In the end, the markets managed to hang on to most of the gains, although volume was the lightest of the year, which makes that rebound suspect.

Our models inched higher with the markets; however, gains were less than the S&P 500’s due to our reduced equity exposure.

Here’s the latest update:

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Equity ETFs Rebound On Week’s First Trading Day; CHIM Vaults, VXX Tanks

Ulli Market Review Contact

[Chart courtesy of MarketWatch.com]

As recent polls suggested that Greece is moving towards honoring its commitments ahead of next month’s elections, US stocks rose one percent Tuesday even as US consumer confidence reading dropped unexpectedly in May and home prices dipped further.

Sentiment was buoyed further as investors hoped that central banks globally would provide further stimulus and China would intervene to support its slowing economy. Sure, if there are no facts, rumors will do—anything to prop up the markets.

US Treasuries wavered as reports from Spain suggested Bankia may require €23.5 billion in bailout money versus an initial estimate of €19 billion. Nor surprise there, as all reports need to be taken with a grain of salt.

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ETFs/Mutual Funds On The Cutline – Updated Through 5/25/2012

Ulli ETFs on the Cutline Contact

Below are the latest ETF Cutline reports, which show how far above or below their respective long-term trend lines (39 week SMA) my currently tracked ETFs/MFs are positioned.

The first report covers the ETF Master List from Thursday’s StatSheet and includes 398 ETFs, of which currently 215 (last week 157) of them are hovering in bullish territory.

The second report includes only High Volume ETFs. To clarify, High Volume (HV) ETFs are defined as those with an average daily volume of $10 million or higher.

These ETFs are generated from my selected list of some 93 that I use in my advisor practice. It cuts out the “noise,” which simply means it eliminates those ETFs that I would never buy because of their volume limitations. 29 ETFs (last week 22) have managed to remain in bullish territory after the recent sell off.

The third report covers Mutual Funds on the Cutline. There are currently 551 (last week 312) above the line and 310 below it out of the 861 that I follow.

Take a look:

1. ETF Master Cutline Report

2. ETF High Volume Cutline Report

3. MF Cutline Report

In case you are not familiar with some of the terminology used in the reports, please read the Glossary of Terms.

Last Week In Review: ETF News And Blog Posts To 5/27/2012

Ulli Market Review Contact

In case you missed it, here’s a summary of the ETF topics and market reviews I posted to my blog during the week ending on 5/27/2012.

Finally, the S&P 500 managed to surprise to the upside by gaining 1.7% for the week after what seems like endless losses.

The Greek saga managed to make headlines again and front page news reports are trying to outdo each other with the latest in speculations as to when and how Greece will call it quits with the EU. It does not appear that any answer to that question is in sight until after the elections on June 17.

Close behind and not lacking in drama is the worsening banking crisis in Spain followed by the slowing economies in China and India.

There is much guesswork as to what will happen next and since no one has that answer, I recommend you stay tuned to the trends and stop loss points of your holdings. To me, that is the only real thing that is real in a surreal world.

This week, we covered the following:

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